MARKETING

The Beagle has landed

Darwin Professional Underwriters leads
evolutionary change in professional liability

Dennis H. Pillsbury

From left: Paul Romano, Senior Vice President; Robert J. Asensio, Senior Vice President and Chief Information Officer; Stephen Sills, President and CEO; and David Newman, Senior Vice President and Chief Underwriting Officer.

Charles Darwin’s legendary journeys on the HMS Beagle eventually led to his theory of natural selection and the evolution of the species. Stephen Sills’ journeys may not have led him to the Galapagos Islands with its plethora of uniquely adapted creatures, but it did result in an evolution in professional liability underwriting that started when he founded Executive Risk Corp., now part of Chubb, and now continues at Darwin Professional Underwriters, Farmington, Connecticut, founded by Stephen in 2003. Darwin offers non-medical E&O, D&O products, and medical malpractice.

As Stephen puts it, Darwin focuses on “mispriced and poorly serviced business. If you have some difficult classes, we’re there. We’re not looking for pristine risks; we’re willing to look at business that has some nicks and dents,” he quips.

In the non-medical area, Darwin looks for difficult-to-place professional liability clients in the legal field or in the insurance-related classes, as well as programs developed in conjunction with program administrators. One such program is a psychiatrists program available in most states through a Long Island-based MGA.

From left: Annamarie D. Haught, Esq., Assistant Vice President-Lawyers Professional Liability; Nicole Haggerty, RPLU, Assistant Vice President and Senior Underwriter; David Newman; and Kimberly J. Lloyd, Senior Health Care Underwriter.

In the insurance E&O field, Darwin offers coverage for wholesale brokers, surplus lines brokers, MGAs, MGUs, TPAs, reinsurance intermediaries, adjusters, and retail agents and brokers with previous claims. “The market doesn’t like wholesalers and MGAs,” notes David Newman, senior vice president and chief underwriting officer. “Each of these areas requires a closer look to determine the underlying risks, and that’s where we excel.” The Target Markets Program Administrators Association (TMPAA) has endorsed Darwin as the E&O provider for its members.

In the legal field, Darwin’s target is smaller firms with up to 50 attorneys, although coverage is available for larger firms. “We also focus on firms that are considered ‘nonstandard’ by the market due to their area of practice or previous claims history,” David points out.

Limits up to $10 million are available in the non-medical E&O area.

In the D&O area, Darwin provides coverage for both public and private companies, as well as A-side difference-in-conditions coverage excess of traditional D&O. Here too, Darwin looks at companies that may be difficult to place in the general marketplace.

Darwin’s medical malpractice coverage is geared toward hospitals, health care facilities, miscellaneous medical facilities, and physician/medical groups.

Medical malpractice is done “the old-fashioned way,” Stephen notes. Paul Romano, senior vice president, adds, “Risk management is an important part of what we are trying to accomplish in the medical malpractice field. We operate as an extension of the risk management function of the insured. Our goal is to establish a positive relationship with our medical clients so we can gain a better understanding of the manner in which they practice medicine.

“We don’t just look at historical claims, but we look at why they occurred,” Paul continues. “We focus on the quality of medicine and try to determine if a past claim was an aberration that is unlikely to recur. There are many good medical practitioners who have had a claim. Our goal is to look behind the claim and determine if a particular risk is a good prospect. Another key is the willingness of the client to cooperate with us. We share information on risk management techniques that work and follow up with the client when we recommend improvements in risk management procedures. We’re not just assuming risk; we’re partnering with medical clients.”

He goes on to note that this involvement and documentation of risk management procedures also serve as a defense if a claim does occur. Limits up to $10 million are available.

While medical malpractice is an important segment for Darwin, it has a dedicated health care practice that offers more than med mal. Other coverages include health care D&O for hospitals, health care facilities, managed care organizations, miscellaneous medical facilities and medical groups. It also offers coverage for managed care organizations (HMOs, PPOs, IPAs, PHOs, PBMs) and managed care service providers (TPAs, UROs, CVOs, MSOs, etc.)

Steffanie Goldsmith, CPCU, Assistant Vice President-Distribution Technology with Bob Asensio.

Using technology

The hallmark of Darwin is underwriting and that has been extended to its technology. Where appropriate, says Bob Asensio, senior vice president and chief information officer, “We are providing our wholesalers the opportunity to quote and bind coverage online for small private companies that need D&O, EPL or fiduciary coverage on a stand-alone basis or in a package. The system—i-bindSM—also will allow retail agents to log in through their wholesaler’s Web site and obtain an online bindable quote.”

The i-bind system starts off with a series of questions to determine if a risk meets the criteria for an online quote. “There may be as few as six questions to get a quote,” Bob says. “But, depending on the answer, questions can lead to other questions, if necessary.

“We’ve now made the choice to move to an approved producer approach so we can better align ourselves with wholesalers who understand our appetite and our underwriting criteria. We’re slowly making i-bind available in those lines where it makes sense and only to high-performing wholesalers and select retailers.”

Bob continues, “i-bind is an important part of our overall goal to be a company that responds quickly and creatively to the needs of our brokers and the marketplace.”

The system soon will also incorporate a streamlined renewal process. “A renewal will be able to be printed at the wholesaler’s office along with any supporting documents,” he explains.

Although the system currently is handling smaller accounts, “it is designed to be able to handle companies with up to $100 million in annual revenues,” David points out. “We intend to expand slowly in that direction as we gain a better understanding of its capabilities.”

Stephen observes: “Our goal is to provide superior service to our wholesalers and the retailers on which they depend. We intend to refine and enhance our systems to accomplish that goal, but we will not sacrifice underwriting integrity. Everything we do is predicated on a long-term goal of producing an underwriting profit. That will allow us to continue to be the best service provider to our wholesalers and to the insured. We also will continue to look for areas where we can be the primary insurer or offer the first excess layer. We believe this is vital if we are to maintain control over the account and provide the influence necessary to provide risk management advice to clients.”

Darwin is unique in many ways, not the least of which is that it is a relatively new operation that offers an “A” rating, thanks to its parent, Alleghany Insurance Holdings, LLC. “Alleghany provides us with the capacity to offer significant limits of coverage,” Stephen explains. “However, Alleghany also has made it clear that our goal is not premium volume, but an underwriting profit.”

A list of referral wholesalers can be found at Darwin’s Web site, www.darwinpro.com. Agents also can contact the company’s business development staff for questions about direct access or for aligning with wholesale partners. *